‘Unworkable’ Obamacare under fire after delay

The White House has postponed a provision of Obamacare requiring businesses with more than 50 employees to provide healthcare to their workers. Republicans say the decision is proof of the reform’s failure, while some Democrats see an advantage.

US President Barack Obama’s sweeping healthcare reform, known as “Obamacare”, was the crowning legislative achievement of his first term.

But on July 2nd, the White House announced that one of the law’s key provisions – requiring owners of businesses with 50 employees or more to provide healthcare for their workers – would be postponed for a year.

According to the provision, companies would have to pay the Internal Revenue Service $2,000 for each full-time employee who did not get health coverage.

Now the mandate, originally scheduled to go into effect at the start of 2014, will not begin until 2015 – after the anxiously awaited 2014 midterm elections.

Many business leaders welcomed the change, and the Obama administration has been selling the decision as evidence of its flexibility.

“This is a demonstration of our willingness to work with the business community,” White House Deputy Press Secretary Josh Earnest told reporters, portraying the move as an effort to roll out the reform carefully and correctly, rather than hastily.

Whose advantage before midterms?

But whether the decision to postpone one of the key elements of Obamacare will benefit Democrats or Republicans ahead of the crucial Congressional elections remains to be seen.

Republicans, who have campaigned hard to discredit the law since it was signed, said the delay proved the Obama administration is aware that the president’s signature domestic achievement is tough to implement and hard on small businesses.

“This is a clear acknowledgment that the law is unworkable, and it underscores the need to repeal the law and replace it with effective, patient-centered reforms,” House of Representatives Speaker John Boehner said in a statement.

Boehner also said the administration should now provide relief to individuals who face a penalty if they do not obtain health coverage by 2014. The “individual mandate” is slated to begin next year at $95 and rise in phases to $695 per person by 2016.

Moreover, Republican leaders of the House Energy and Commerce Committee have demanded that the Treasury secretary and the Secretary of Health and Human services provide documents explaining why the decision was made.

The delay and the Republican criticism complicate the White House’s continued efforts to emphasise the benefits Obamacare affords individuals in the run-up to the midterms.

On the other hand, it also robs Republicans of the argument that small businesses have been crushed by new costs and regulations, since the provision won’t kick in until after the elections.

Labor group annoyed

In the 2010 midterms, many Democrats distanced themselves from Obamacare, since polls showed Americans sharply divided in their opinions of the law. The Republicans’ success in portraying the reform as an albatross that would replace individual choice with government regulation in matters of healthcare helped the party win back the House of Representatives.

But Democratic strategists have been urging candidates up for election in 2014 to highlight the popular elements of Obamacare – such as a provision that allows children to stay on their parents’ healthcare until age 27, and another that denies insurance companies the right to refuse healthcare to individuals with “pre-existing” medical conditions.

The White House has also launched an information campaign that explains which benefits are available to which voters.

Meanwhile, some of the most vocal criticism of Obama’s decision to postpone employer-provided coverage has come from one of his staunch allies: the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations), which called the delay “troubling”.

AFL-CIO President Richard Trumka has called for the White House to address the concerns of workers, as well as those of the business community.